In a major regulatory update, the Securities and Exchange Board of India (SEBI) has approved an increase in the disclosure threshold for foreign portfolio investors (FPIs) from ₹25,000 crore to ₹50,000 crore. This decision follows a sharp rise in cash equity market trading volumes, which have more than doubled between FY23 and FY25.
SEBI’s move aims to enhance transparency in foreign investments while maintaining regulatory oversight. FPIs exceeding the ₹50,000 crore equity assets under management (AUM) threshold will now be required to submit additional disclosures in line with the Prevention of Money Laundering Act (PMLA) and related rules. These regulations were initially implemented to prevent the circumvention of Press Note 3, a 2020 government directive tightening scrutiny on investments from neighboring countries.
While SEBI has raised the threshold, it has retained the condition requiring FPIs to disclose details if over 50% of their equity AUM is concentrated in a single corporate group. This ensures that large investors remain subject to scrutiny while allowing flexibility for smaller participants.
By adjusting disclosure norms to reflect market growth, SEBI seeks to balance regulatory efficiency with investor confidence. The decision underscores India’s evolving financial landscape, reinforcing its commitment to a transparent and well-regulated market for global investors.
